Wednesday, November 30, 2022
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Did Amazon have “121 billion profit in the second half of 2022 in Europe”, as MP Thomas Portes writes?

The elected Nupes-LFI wanted to condemn the discrepancy between the amounts collected by the e-commerce giant and the amount of tax he pays in Europe. But got entangled in the process.

Amazon makes billions in profits while not paying taxes on these amounts to European states. This is the idea defended by Thomas Porte, deputy of Nupes-La France insoumise from Seine-Saint-Denis. After a study published in Humanity On Monday, November 7, the deputy tweeted claiming that the US e-commerce giant “made 121 billion in profit in the second half of 2022 in Europe”.

The figure was later picked up in a Communist Party publication which lamented: “Amazon has 121 billion in profit in 2021 in Europe.” But also by the colleague of Thomas Portes in the National Assembly, elected from Haute-Vienne, Damien Maudet.

Problem: This 121 billion actually corresponds to Amazon’s revenue and not to the company’s profit. So the figure does not relate to the second half of 2022 (which is not yet finished), but to the second quarter of the year. Finally, it covers all of Amazon’s activities globally, not just in Europe.

Accounting annex

That is actually what indicates Humanity in his article, both in the printed version of the daily and in its reproduction on the newspaper’s website. “While the multinational achieves record revenues – $121 billion in the second quarter of 2022 – Amazon paid no tax on its profits in Europe in 2021”, is it written there. The human being thus uses here the term “income” as a synonym for “revenue” (although from a strictly accounting point of view the two indicators may be different).

The figure of $121 billion is taken directly from Amazon’s accounts, whose results for the second quarter of 2022 were published on July 28. Despite this significant revenue, the e-commerce leader claims not to have turned a profit at the same time, but a “net loss” of $2 billion.

It should be noted that more recent results have since been released, those relating to the third quarter of 2022. Published on October 27, they report revenue of $127.1 billion for this period and a “net profit” of $2.9 billion.

“Sorry, It Happens”

Asked about his triple confusion, both spatio-temporal and with regard to the indicator used, Thomas Portes replies to CheckNews that he has “made an error while tweeting”, adds: “I was wrong, sorry, it happens.” As for Damien Maudet, he himself responded on Twitter by correcting the use of the word “advantage” by “turnover”.

This confusion does not detract from the content of the speech given by the rebellious deputy, he believes, who insists on the discrepancy between the amounts collected by Amazon and the amount of taxes that the group has to pay: “€0!” In fact, Amazon Europe did not have to pay taxes in 2021 due to losses of 1.16 billion euros – while the European subsidiary of Amazon recorded that year a figure income of 51.3 billion euros (+17% over a year). Losses attributed by the company to investments made on European soil.

Amazon Europe also benefits from special tax provisions thanks to its establishment in Luxembourg, a country where the American giant chose to establish itself in 2003. These tax arrangements have made Amazon a privileged target for European regulators. While in 2017 the European Commission had demanded 250 million euros in arrears, considering that the Luxembourg tax rebates constituted irregular state aid, this decision was annulled in 2021 by the European Court of Justice.

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